On November 3, Democrats won control of both chambers of Congress and made significant gains in state offices, including flipping five Republican-held attorney general seats. The results will shift congressional oversight and could strengthen state enforcement coalitions when the new Congress and state officials take office in January.
With control of both chambers, Democrats will set congressional committee agendas and may increase scrutiny of consumer financial services. Expected areas of focus include lending costs, household debt, credit reporting, debt collection, ability-to-repay standards, and optional financial products. Hearings, investigations, subpoenas, and document requests could bring industry practices into public view. Democratic lawmakers may also seek to restore or strengthen the CFPB following the current administration’s efforts to scale back the Bureau.
The state-level election results may also affect enforcement priorities. Newly elected attorneys general in Texas, Georgia, Ohio, and other states could join or lead multistate investigations into lending and other financial services practices, particularly where federal enforcement has receded. The election does not determine which matters officials will pursue, but it may alter the direction and coordination of state oversight.
Putting It Into Practice: The election could change the consumer finance enforcement environment even without new federal legislation. Lenders, servicers, and other financial services providers should review pricing, disclosures, collections, credit reporting, and other consumer-facing practices for potential congressional or coordinated state scrutiny. Companies should monitor congressional inquiries and state enforcement announcements as officials set their priorities.
*Amanda Yap is a law clerk in the firm's Orange County office.